Aggressive marketing by Telecom Italia Mobile in São Paulo has taken both Vivo and BCP by surprise. TIM is offering handsets for the equivalent of half a dollar plus 500 minutes for 99 Brazilian Reals (now about 33 US Dollars) over an 18-month period ? 100 minutes for calls to subscribers of other carriers and 400 minutes for calls to TIM customers. The Italians went straight to the market that spends most on mobile phones and is the most profitable for the wireless sector.
BCP, burdened by financial difficulties, has been forced to offer new handsets in exchange for old at subsidized prices and discounts averaging 20% on calling plans. Vivo?s response is similar.